Against the backdrop of Ukraine's announcement of a 30-day ceasefire plan today and the US temporarily suspending the 50% tariff on Canadian steel and aluminum products in retaliation, Bitcoin has rebounded from around $79,000 to $83,000 as of the editorial deadline, with a cumulative gain of about 5%.
Weak risk assets drag down Bitcoin
This overall economic relationship deeply tied to Bitcoin is consistent with the analysis of Standard Chartered analyst Geoff Kendrick. He pointed out that Bitcoin's recent price movements are closely related to the broader weakness in the risk asset market, rather than problems within the cryptocurrency itself.
The decline in Bitcoin is mainly influenced by the overall market sentiment, rather than "internal problems of Bitcoin itself".
He further stated that, on the basis of volatility adjustment, Bitcoin's performance in the "Big Tech + Bitcoin" group is relatively stable, indicating that Bitcoin has not actually fallen that much:
After volatility adjustment, Tesla performed the worst, Meta and Apple the strongest, and the remaining assets were on par with Bitcoin.
Potential drivers of the uptrend
Kendrick pointed out that Bitcoin's rebound may be driven by two catalysts:
- Overall recovery of the risk asset market
- Positive news for Bitcoin itself, such as official purchases by the US or other countries
In terms of risk assets, he believes that if the Fed accelerates the pace of rate cuts or Trump's tariff policy is clarified, it will help the market recover.
"If the probability of a rate cut in May increases from the current 50% to 75%, the market may see a rebound."
However, if the market remains weak, and Bitcoin breaks below $76,500, it may further test the $69,000 support level. Nevertheless, Kendrick still maintains a long-term bullish target, predicting that Bitcoin will reach $200,000 by the end of 2025.
"Short-term volatility does not affect my confidence in the $200,000 target, but rather makes it more likely that the Fed will cut rates, further strengthening my long-term bullish outlook," Kendrick emphasized.
The probability of the Fed not cutting rates next week is as high as 96%
The Fed will hold its interest rate decision next Wednesday (19th), and Fed Governor Adriana Kugler believes that the central bank should maintain the current interest rate level due to concerns about persistent inflation.
However, CoinDCX Ventures Managing Director Rohit Jain believes that if the Fed does not cut rates, it may dampen the sentiment of risk assets, further impacting the cryptocurrency market.
"This hesitation to cut rates may trigger further sell-offs, with Bitcoin potentially testing the $70,000 support, and Altcoins like Ethereum and Solana also being affected."
Currently, according to the CME FedWatch tool, the probability of the Fed keeping rates unchanged is as high as 96%, with only a 4% chance of a 25 basis point cut, and the market generally expects no rate cut in March.
